Pages

Wednesday, January 25, 2012

What’s Your Soil Strategy?

At a meeting yesterday in New Haven, with folks building exciting
entrepreneurial energy in that city, we talked about focusing beyond
the entrepreneur.

Successful companies have great leadership teams. One angel
investor said that he almost never sees a business plan without gaping holes in
the leadership team. Another participant then spoke of the analogy of our work
with permaculture, an approach to agriculture that looks to natural ecosystems rather
than business frameworks.

Permaculture’s focus on the soil and approaching agriculture
from an ecosystem perspective ensures abundant harvests and healthy profits. Profits that
are reinvested to ensure abundant future harvests.

This is a useful analogy for small market cities like New Haven.
The challenge with small cities is that they’re small. People, ideas and resources don’t come
together with the same frequency or velocity as they do in big cities, making it harder to generate
the critical mass of economic activity that becomes self-sustaining.

I forget where I read it, but the example of the Vietnamese
Chef in New York City vs the Vietnamese Chef in, say, Bangor, is instructive. In
New York City the Chef must compete for customers with many other Vietnamese Chefs.
He specializes and becomes very good. He
meets a Spanish Chef at a Food Network forum for the city's best chefs, who through the same forces has also becomes very good. They team
up and open a popular fusion restaurant. The Food Network profiles the restaurant
and their popularity grows further.

The Vietnamese Chef in Bangor has a very different
existence. His is the only Vietnamese restaurant in town. Unfortunately he
needs a population of 100,000 just to have enough potential customers to stay alive. Bangor only has a population of 30,000. After a good first couple weeks his door stops flying
open and the restaurant must close.

The soil in New York has nurtured innovation with market
size, diversity and specialization. Entrepreneurs can more easily develop products and find people to complete their leadership teams. These forces do not exist by themselves in
Bangor. The Bangor’s of the world need to find ways to fertilize their soil and imitate these forces while building on the advantages of small cities. It seems that the folks in New Haven are on their way to figuring it out.